“We regularly gift to our 23-year-old daughter, and she recently asked if she could invest $50,000 of her account in crypto. We want to encourage her interest in investing and let her explore new asset classes, but we’re also worried about it becoming an expensive lesson. What are smart parameters we can set around learning capital without micromanaging?“
Encouraging Autonomy While Protecting Habits
Once you gift money, it’s no longer yours—it’s your child’s. That means you can’t (and shouldn’t) micromanage how it’s invested. The upside here is that your daughter is showing genuine interest in finance and wants to engage with markets. That spark of curiosity is a major win.
The challenge is making sure she can learn from the experience without putting too much wealth at risk.
Introducing “Learning Capital”
Many investors set aside a small percentage of their portfolio for speculative or “fun” investments. Think of it as tuition paid for learning how markets work. The key is to set parameters.
For a young investor with a long time horizon, the bulk of the portfolio should be in diversified equities. A small allocation—5 to 10%—can be dedicated to higher-risk opportunities like crypto. This allows exploration without jeopardizing long-term growth.
Diversification Beyond a Single Coin
Rather than putting everything into one cryptocurrency, consider broader exposure. Options include:
- Splitting across multiple coins
- Using ETFs or funds that provide exposure to crypto-related businesses (miners, exchanges, chipmakers)
- Treating crypto as one piece of an “alternative” bucket, not the whole strategy
This reframes crypto as part of an industry trend rather than a single bet.
The Real Value of the Lesson
Whether the crypto investment soars or stumbles, the bigger win is your daughter’s engagement with markets and her chance to begin forming her own investment philosophy. The financial outcome is secondary to the habits and discipline she builds now.
This post was adapted from an episode of the Scholar Wealth Podcast. For more insight, listen to the full episode here.